Morning forex briefing
In early New York trading the USD is slightly firmer against the majors after a quiet overnight session that saw mostly range trade and technical trade.
In Asia, the USD/JPY saw a bit of higher price action as traders squared positions ahead of the FOMC meeting tomorrow. Analysts note that volumes have been lighter and some technical studies show signs of bearish divergence. Although the markets have likely factored in a â€œno changeâ€ in interest rates from the Fed, traders are heavily focused on the wording of the statement for clues to the Fedâ€™s next move.
Traders appear to be cautious of the USD/JPY around the 119.50 level as offers appear to be very thick above the 119.80 area with stops equally thick above the 120.00 handle. Should the pair be unable to trade higher from current levels, many fear a sharp liquidating break. In my view the USD/JPY is ripe for a massive move and aggressive traders could place a low-risk short anywhere above the 119.50 area.
Cable saw volatility this morning in Europe on the news that UK CBI data was weaker than expected posting a reading of -20 compared to -5 in September. GBP sold off on the news for an intraday low at 1.8671 but US names and Japanese names stepped in on the bid and GBP currently is 1.8715 to start New York. Traders say that volumes will likely be on the softer side today ahead of FOMC.
EURO continues to base above the 1.2520 area; a brief dip in sympathy with cable saw a low print at 1.2524 before semi-official demand and Middle-Eastern names were seen on the bid. Traders expect EURO to hold between 1.2570 and 1.2520 ahead of FOMC as well. In my view, when nothing is happeningâ€”